Comex gold futures nudged lower on Thursday, giving up some of its gains made after US President Donald Trump's threat of a government shutdown, with investors remaining focused on a major central bankers conference in Jackson Hole.

Comex gold futures are moving perfectly in line with our expectations so far. As mentioned in the previous update, we expect prices to edge towards $1,295-1,300 a potential target area. Momentum in the near-term has been waning and prices are in a consolidation phase. The critical $1,300-05 resistance needs to be taken out convincingly to expect further bullishness ahead.

Therefore, the price consolidation is ideal for taking a breather presently. As explained in the previous update, the trigger for a rise could be on a close above $1,272, which could hint at a revival in upward momentum. This level could now hold supports on the way down. Break below $1,278-80 could temporarily dent the prospects of further upside. Such a move could see prices testing $1,257-60 followed by stronger supports at $1,252-53 . In the medium-term possibility exists for this move to extend to $1335-37 levels, an important medium-term resistance level. Favoured view expects prices to edge higher after the consolidation.

It looks more likely that supports at $1,278-80 to hold for a push higher towards $1,305 or even higher in the coming sessions.

We will take a look at the wave counts now and understand the possible scenarios that can unfold going forward. It is most likely that the fall from the all-time highs at $1,925 to the recent low of $1,088 so far, was either a possible corrective wave "A", with a possibility to even extend towards $1,025-30 or a complete correction of A-B-C ending with this decline. Subsequently, to this decline, a corrective wave "B" could unfold with targets near $1,375 or even higher. After that, a wave "C" could begin lower again. Alternatively, we can also expect wave "B" to extend to $1,476 . If the current decline as a whole from $1,920 can be considered as a fourth wave, then the fifth wave could begin and cross $1,700 in the long-term. But, failure to follow-through above $1,355 has dashed any hopes of any impulsive up move.

As prices have broken certain important supports and shows weakness targeting $975 , we are tilted towards looking at this as a corrective wave "C" in progress. RSI is in the overbought zone now indicating a possible correction in the offing. The averages in MACD have gone above the zero line of the indicator again, indicating a bullish reversal. Only a cross over again below the zero line could hint at a reversal in trend to bullish.

Therefore, Buy Comex gold on dips to $1,278-80 with stop loss at $1,267 targeting $1,305 followed by $1,335.

Supports are at $1,278, $1,1265 & $ 1,253 and Resistances are at $1,305, 1,335 & 1,351.

The writer is the Director of Commtrendz Research. There is risk of loss in trading .

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